German sportswear company Adidas is preparing to close more stores this year to focus on digital initiatives. Calling its website “the most important store we have in the world,” Adidas CEO Kasper Rorsted told the Financial Times on Sunday that the company will reduce its store count globally this year. The plan is to spend €900m in 2018, with much of the spending going to digital operations such as logistics and infrastructure, including fulfillment warehouses for online orders.
The company plans to close 170 stores this year. 220 stores closed last year, with 180 of that count in Russia.
The company will still open news stores, but focusing only on 10 to 15 key cities in the world, instead focusing the bulk of their investments towards e-commerce and digital infrastructure.
The brand is planning to hire over 200 employees in that area, and Rorsted told FT that e-commerce grew 57% last year. He also said that the company’s goal is for revenue from online sales to more than double to €4bn by 2020.
Adidas has already been going after the digital market in a bigger way. It launched a mobile app in the U.S., U.K. and Germany that gives customers the ability to personalize their sneakers. The app is slated to launch in France, Spain and Canada during 2018.
Unlike many retailers, Adidas is also seeing healthier margins in its digital sales than at stores. While the company is shrinking its footprint overall, it will open or remodel stores in key cities to amplify the customer experience.